Members of the Consultative Group for Peru and Ecuador pledged $160 million in additional support for the Binational Development Plan that is a part of the peace accords signed in October 1998.

Projects will help protect the Amazon forest region between the two countries
(Photo: David Mangurian, IDB)

The plan will fund development programs along the formerly disputed border area between the two countries that will combine economic and social development with environmental protection. Of the $3 billion estimated cost of the plan, some $2.4 billion would come from official and multilateral sources and $600 million from the private sector. Of the $2.4 billion from official and multilateral sources, approximately $600 million is to be provided during the 10-year period in the form of grants.

The consultative group held its first meeting in New Orleans in March prior to the IDB’s annual meeting. Some 120 delegates representing 22 countries and 17 international agencies participated in the meeting, which was chaired by the IDB.

The $160 million pledged at the meeting will help finance investment projects and feasibility studies in the areas of health, education and human development, transportation, and small business and microenterprise. Other areas under consideration are biodiversity and environment, water basin management, potable water and sanitation, electricity services and institutional development of local government organizations.

The IDB and the Andean Development Corporation (CAF) reaffirmed their commitment to provide $500 million each in the form of loans to fund economic, social, and environmental projects. The CAF funds will be used to finance rural roads in Ecuador and a preinvestment loan for Peru. The IDB is considering financing for roads, border infrastructure and other social and economic integration projects in the area. The World Bank has indicated that it plans to provide an additional $200 million for border programs.

Some 85 percent of the 400,000-square-km border area is made up of Amazonian lowlands; of the remainder 10 percent is coastal and 5 percent mountainous. The area has a total population of 4.5 million, of which 1.6 million is Ecuadorian and 2.9 million Peruvian.

The Binational Plan will aim to harmonize development policies for the sustainable use of ecosystems along the border while providing infrastructure and services to meet basic human needs.

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